Trading update and trading statement Clover Industries Limited (Incorporated in the Republic of South Africa) (Registration number 2003/030429/06) Share code: CLR ISIN No: ZAE000152377 NSX Ordinary Share code: CLN (“Clover” or “the Group” or “the Company”) TRADING UPDATE AND TRADING STATEMENT Trading update Shareholders of the Company are referred to the voluntary Stock Exchange News Service (SENS) announcements of 27 October 2016 and 5 December 2016 advising that trading conditions remained constrained with sales volumes tracking below anticipated levels. The Company further advised that strong trade during the festive season was critical to match the financial performance achieved for the six months ended 31 December 2015 (“comparative period”). Shareholders are hereby advised that December volumes tracked markedly lower than the comparative period. All categories with the exception of UHT and fermented products reported lower volumes than in the comparative six-month period, mainly as a result of negative consumer sentiment that was further compounded with the wet and cooler summer compared to the heatwave that prevailed in the comparative period. The Company had to increase its selling prices in the market substantially to recover not only inflationary cost increases, but also a higher than anticipated raw milk price due to the continued drought, and sales volumes as a result came under further pressure. While the Group anticipates an increase in overall revenue, it does not expect the increase in revenue to fully absorb all inflationary cost increases in the first half of the year, and as a result, a fine balance was needed to balance price increases and protect our market shares. Importantly, significant once-off restructuring costs related to the integration of the Company’s City Deep distribution facility into the Clayville distribution facility were incurred during the period. In addition, Clover continued to expand its value-added product range with new listings which generally attract higher initial costs to establish the product in the trade. The Board remains confident that the long-term benefits of the City Deep integration and new launches will accrue in the second half of the financial year and beyond. Trading statement Shareholders are hereby advised that due to the reasons explained above, Clover expects headline earnings for the six months ended 31 December 2016 (“the period”) to be between 14.6% and 24.6% lower and earnings to be between 12.1% and 22.1% lower than the comparative period. Headline earnings per share (“HEPS”) for the period is expected to be between 15.7% (18.33 cents) and 25.7% (30.02 cents) lower than HEPS of 116.96 cents reported for the comparative period. Further, earnings per share (“EPS”) for the period is expected to be between 13.2% (15.36 cents) and 23.2% (26.96 cents) lower than EPS of 116.07 cents reported for the comparative period. Despite the lackluster operating environment, Clover remains committed to its medium to long term goals of investing in and growing its value added product portfolio and to balance cost recoveries from consumers with market position. Shareholders are referred to the SENS announcement of 5 December 2016 regarding the Group’s proposed restructure to give effect to its stated objective of developing higher margin, value added products in dairy and other related food categories and to eliminate its exposure to the cyclicality of its low margin business in future. The planned restructuring aims to accelerate this migration process away from low margin products. Further details of this proposed restructure will be communicated in due course. The forecasted financial information on which this trading statement is based has not been reviewed and reported on by the Company’s external auditors. The Company expects to release its annual financial results for the year ended 30 December 2016 on SENS on or about 01 March 2017. Johannesburg 18 January 2017 Sponsor RAND MERCHANT BANK (A division of FirstRand Bank Limited) NSX Sponsor IJG SECURITIES Date: 18/01/2017 03:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.